Cantor Fitzgerald: Robinhood, Coinbase to benefit most from prediction market growth

Investment bank Cantor Fitzgerald believes Robinhood and Coinbase are poised to be the biggest beneficiaries of the rapid growth in prediction markets, CoinDesk reported, citing a note from the firm. In the report, Cantor Fitzgerald stated that prediction markets are expanding quickly and are expected to maintain this impressive growth. While major platforms like Kalshi and Polymarket remain private, public companies are integrating event-based trading into their apps to capitalize on the trend. The bank explained that these firms have an inherent advantage in boosting liquidity and participation due to their large retail investor bases and existing trading infrastructure. Cantor Fitzgerald also addressed the misconception that prediction markets are disguised gambling platforms. The report argued that users buy contracts they believe are undervalued and sell those they see as overvalued, similar to the stock market, and predicted that these markets will emerge as a versatile tool for institutional investors. However, the firm noted that regulatory issues remain an uncertainty. The current situation is confusing, with federal and state authorities divided on whether prediction markets should be governed by derivatives law or gambling regulations. Despite this, Cantor Fitzgerald concluded that the markets are unlikely to disappear, placing companies with large user bases and strong distribution networks like Robinhood and Coinbase in a favorable position.